Indian exports touch record $418 billion in FY22

Much before the start of March 2022, Minister of Commerce and Industry, Piyush Goyal, had claimed that India would cross the $400 billion exports mark in FY22. Cross, India did and they did in style ending the financial year 2021-22 with $418 billion of merchandise exports.

In value terms, the exports for FY22 were a good 40% higher than FY21. One argument is that this was largely commodity price driven, but it is still robust growth.

If you look at the month of Mar-22 alone, merchandise exports stood at an all-time high of $40.38 billion. This compares favourably with $34 billion of merchandise exports in March 2021.

As stated earlier, much of the growth was driven by commodity prices becoming a lot more expensive during the year amidst rampant wholesale inflation. The growth was driven by products like petroleum products, gems & jewellery, engineering products, chemicals etc.

March was a record on the trade front in a number of ways. This was the first time that India had achieved $40 billion merchandise exports in a single month. This was also the first time that merchandise exports for the full fiscal year was well above $400 billion.

This was also the first time that total trade (exports plus imports) crossed the coveted $1 trillion mark. But, it also meant that the merchandise trade ended up close to $190 billion for FY22.

Interestingly, the government has not yet released the import data for the year, which is quite surprising. However, trade experts peg the total merchandise imports for FY22 at $589 billion, although it does sound too conservative.

Many of the key import items like crude, gold, coal and fertilizers have seen consistent price rise through the year. So, $589 billion for full year imports does look too conservative to be true, but we must await final data.
 

In terms of trends, some interesting trends were visible. For instance, the export basket of India is not just confined to raw materials or intermediate goods; as was the case in the past.

There is a perceptible shift to manufactured goods, especially products like engineering goods, electronic goods and even high end specialty chemicals and pharmaceutical products have seen a surge in exports during the year gone by.

Some of the products are quite significant and notable in terms of YoY growth. For example, electronic goods witnessed a 40% jump in FY22 after it received a massive push from the production-linked incentive scheme (PLI).

Even non-petroleum exports were up by over 33% YoY.  Some of the countries that became big markets for Indian exports on a YoY basis are the US, the Netherlands, Singapore, Hong Kong, United Kingdom, Belgium and Germany too. 

The volatility in commodity prices, supply chain disruptions, the ongoing war between Russia & Ukraine as well as the availability of containers are likely to have an impact on the overall trade scenario.

Several brokerages and rating agencies have lowered India's GDP forecast and the latest among them is industry body, FICCI. However, over the last 2 years, exports have shown an independent momentum and that should hold up exports.